WHAT WE DO: INVESTING FOR ALASKA
Viewed as one of the largest, most effective, and globally-positioned institutional investors among U.S. investment plans, the Permanent Fund is also positioned to participate fully in the future economic opportunities in both industrialized and high-growth emerging markets. To that end, APFC is actively partnering with leading investment managers and institutional investors operating on each major continent with the objective of gaining access to the most compelling investment opportunities around the globe as they arise.
By adhering to an investment practice which ensures investment efficiency (whereby investment returns are compensated for the risks under taken), prudent diversification, and best-in-class access to compelling opportunities, APFC hopes to continue its history as being among the best-managed sovereign wealth funds in the world, all while helping to serve Alaska’s current and future generations for many decades to come.
APFC’s Investment Philosophy is simple: Generate compelling investment returns which efficiently reward the investment risks undertaken by the Permanent Fund (and other Alaska state funds as mandated by law) through the production of both regularized income as well as capital gains. Success is measured over three time horizons—(1) Long-Term (5+ years): Generate total returns in excess of inflation (CPI) + 5%, (2) Medium-Term (3-years): Aim to achieve top-quartile investment returns in relation to institutional investor peers (U.S. Public Plans, U.S. Endowments, International Sovereign Wealth Funds), and (3) Short-Term (1 year): Earn regularized income sufficient to support the operating and related needs of the Alaska state government while outperforming a passive (unmanaged) global index portfolio of stocks and bonds.
APFC Investment Policy May 2022
APFC’s investment management strategy relies on the combination of both efficient asset allocation design and effective investment with in each asset class it manages. Generally, APFC employs a combination of internally managed direct investments alongside externally-managed fund investments in order to secure the best access to high-quality investment opportunities worldwide. Major asset classes include public equities, fixed-income, private equity, real estate, infrastructure, absolute return, risk parity strategies, and cash that are managed to outperform specific long-term growth and income targets. In addition, illiquid opportunities among APFC’s private equity , real estate, and infrastructure investments are underwritten to capture the benefits of an “illiquidity premium” that can prevail among these assets. In combination, this portfolio targets investment returns in excess of inflation (CPI) plus 5% or better on a long-term basis as well as compelling performance as measured against peers and market index benchmarks.